Uzbekistan

Postcommunist Economic Reform

With the collapse of the Soviet Union, Uzbekistan faced serious economic
challenges: the breakdown of central planning from Moscow and the end of a
reliable, if limited, system of interrepublican trade and payments
mechanisms; production inefficiencies; the prevalence of monopolies;
declining productivity; and loss of the significant subsidies and payments
that had come from Moscow. All these changes signaled that fundamental
reform would be necessary if the economy of Uzbekistan were to continue to
be viable.

Traditionally a raw materials supplier for the rest of the Soviet Union,
Uzbekistan saw its economy hard hit by the breakdown of the highly
integrated Soviet economy. Factories in Uzbekistan could not get the raw
materials they needed to diversify the national economy, and the end of
subsidies from Moscow was exacerbated by concurrent declines in world
prices for Uzbekistan's two major export commodities, gold and cotton.